New head of the CDB touts benefits of private sector

The governors of the Caribbean Development Bank commended the CDB’s 2010 performance when they met in Trinidad and Tobago last week. But they also recognized that, because of the huge challenges in earthquake-struck Haiti and the 17 English-speaking, mostly economically depressed, territories that are borrowing members of the Bank, the CDB now needs to be much more proactive and expand its intervention.

In 2010, the bank provided $300 million in loans and grants to the borrowing members, compared with $167 million in 2009. A decision to increase shareholder capital by 150 percent and also widen its soft lending window — which finances mostly grant and concessionary loans — has extended the bank’s capacity to assist borrowers.

It was clear from some governors’ speeches that their governments felt while the bank had performed well in the circumstances, the results being achieved were by no means entirely satisfactory.

The bank could be doing much more within the regional economies to limit poverty, reduce unemployment, counter disease and crime, improve the quality of housing, education and health and, generally, accelerate the pace of economic and social development. Increased support was pledged at the Trinidad and Tobago meeting for this more activist, more efficient CDB.

Shareholder countries are 17 English-speaking territories in the region, together with Colombia, Haiti, Mexico and Venezuela and Canada, China, Germany, Italy and the United Kingdom. An application from Brazil has been accepted by the Bank but there has been no announcement that the membership formalities have been completed. Colombia, Mexico and Venezuela contribute to the resources of the bank but do not borrow.

The UK said in its statement to this 41st meeting of the board of governors that it was committed to achieving the United Nations target of contributing 0.7 percent of gross national income to development by 2013 — two years before the target year of 2015 for achieving the millennium development goals — and some of these additional resources to be allocated by London would be going the CDB’s way.

Generally, the MDGs point the global community towards the eradication of extreme poverty and hunger; attainment of universal primary education; equality and emancipation of women; reduction of child mortality rates; improvement of maternal health; combating HIV/AIDS, malaria and other infectious diseases; ensuring environmental sustainability; and effecting a global partnership for development.

The CDB’s new president,

, the first Jamaican to head the bank, spoke on “Caribbean Leadership – Confronting the Anxieties of Our People”.

The major concerns included economic insecurity, the impact of climate change, crime and violence nearing epidemic proportions, insufficiently developed human capital, inadequate application of information technology and a too fragile embrace of the private sector. Smith pledged that, in all those areas, the CDB intended to be a leader and a partner in assisting the countries to confront the anxieties of their people.

Speaking about the private sector and the need to also seek regional solutions to national problems, Smith said, “Countries that pursue consistent stabilization policies and undertake needed structural reforms are also likely to witness the emergence of a dynamic private sector.”

“The private sector,” he continued, “can be government’s main ally because it can help to unlock those opportunities for poverty reduction and, therefore, conditions must be made suitable for the private sector to flourish. Reforms should improve, not hinder, the conditions for ‘doing business.’ Modern business legislation must be in place. The state apparatus should discourage corruption and inefficiency. And the labor force must be suitably trained to meet the skills requirements of the emerging economic structure.”